- The COVID-19 pandemic has sparked a boom in mindfulness apps and a wellness boom across Europe.
- By early 2022, investor appetite for the highly competitive wellness market began to plateau.
- VCs have plowed a record $771 million into European startups tackling mental illness in 2021, according to Dealroom.
Wellness was once synonymous with goop eggs and mindfulness coaching.
But as the many pandemic-fueled lockdowns cracked down on human interaction, a segment of the population suddenly turned to an unlikely but convenient means of staying fit: wellness apps. rice field.
Startups such as Headspace, Calm and Meditopia have made headlines across Europe as people seek freedom from seemingly endless restrictions. Health and fitness app downloads surged from 565 million to 811 million in his first quarter of 2020. According to Data.ai.
Investors quickly spotted the emerging demand, investing $8.3 billion in wellness and mindfulness startups in 2021. This is almost double his $4.3 billion in 2020. According to Deal Room.
These apps have helped people manage their mental health through self-help mechanisms such as meditation and mindfulness. However, psychologists have made it clear that they are not a substitute for clinically approved treatments for mental health conditions.
There is now a new wave of startups looking beyond wellness to tackle mental illness.Companies boasting everything from digital treatments to the infrastructure needed to manage mental health are in the bag A record $771 million in Europe in 2021.
In 2022, a number of seed-stage startups providing mental health and illness clinical services have secured funding, and many have partnered with the UK’s National Health Service (NHS).
SFC Chief Investment Officer Joseph Zipfel told Insider: “The NHS has really opened up to working with large early stage companies, something we didn’t see a few years ago.”
Despite the creeping investor interest, there are many problems with relying on startups to treat mental illness. Many of these platforms may be “well-meaning,” but “providing a diagnosis to a patient just for the sake of it” runs the risk of “embodiing a mental disorder,” said a clinical fellow at UCL. Dr. Mauricio Alvarez Monjarras said. , Said.
The lack of regulation and certification requirements is also a “double-edged sword,” he added. “These apps may be created by people without clinical experience.”
But according to Arden Tomison, founder of Thalamos, a startup that digitizes the administration of mental health law, it hasn’t been easy for startups looking to raise VC funding. Tomison, who raised his $1 million last summer for his own startup, said VCs find it “more appealing to talk about mindfulness and yoga.” .
Nonetheless, he said the risk-return for VCs in this space is “very high if they can get their heads around it” because of the low competition but high customer retention and social impact. .
Ben Lakey, co-founder of Syndi Health, a start-up that provides digital infrastructure for NHS and mental health patients, says the sector is still in its infancy, but a health tech-focused fund is on the way. Most interested. “Investors who know the space and the problem understand it.”
But Henry Majed, founder and CEO of employee mental health platform MyMynd, said the startup is now getting attention from generalist VCs “waiting for a shakedown of key players.” .
Investors have yet to reach a consensus on what the burgeoning mental health care ecosystem looks like.
For Syndi Health investor Damien Marmion, the next step is “moving to a horizontal service that consolidates all these solutions in one space, like Syndi.”
But Lascelles and AlbionVC investor Molly Gilmartin say the next step is to verticalize mental health, which startups can instead provide adequate services for specific conditions like schizophrenia and anorexia. He said it meant establishing a niche focus in unserved markets.
But the prospect of verticalization also shines a spotlight on the sector’s growing pains.
Gilmartin said there are “many opportunities for founders to develop clinically-focused tools” for niche audiences, while founders who focus on specific verticals will be part of the equation for the future. Agreed that scalability and privacy should be considered as
“The more we become personalized, the more attention we should pay to privacy,” said Dr. Alvarez Monjaras.
Many of these services are underpinned by one-on-one human contact, such as therapy sessions. This maintenance is a key issue that startups must consider as they begin to scale.
“There is something about human relationships between people, sharing experiences, having an element of being a social being, something like AI cannot replace,” he added.
